Obligation Lenzing GmbH 5.75% ( XS2250987356 ) en EUR

Lenzing GmbH

100 % ▲

Autriche

XS2250987356 ( en EUR )

5.75% par an ( paiement annuel )

Perpétuelle

Prospectus brochure de l'obligation Lenzing AG XS2250987356 en EUR 5.75%, échéance Perpétuelle

100 000 EUR

500 000 000 EUR

07/12/2025 ( Dans 40 jours )

Lenzing AG est une société autrichienne leader mondial dans la production de fibres de cellulose régénérée, notamment le modal, le lyocell et le viscose, utilisées dans l'industrie textile et autres applications.

L'Obligation émise par Lenzing GmbH ( Autriche ) , en EUR, avec le code ISIN XS2250987356, paye un coupon de 5.75% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le Perpétuelle

Prospectus dated 3 December 2020

Lenzing Aktiengesellschaft
(Lenzing, Republic of Austria)
EUR 500,000,000 Undated Subordinated Resettable Fixed Rate Notes
ISIN XS2250987356 , Common Code 225098735
Issue Price: 100 per cent.
Lenzing Aktiengesellschaft (the "Issuer" and together with its consolidated subsidiaries, "Lenzing" or the "Group") will issue on
7 December 2020 (the "Issue Date") EUR 500,000,000 Undated Subordinated Resettable Fixed Rate Notes (the "Notes") in the
denomination of EUR 100,000 each.
The Notes will be governed by the laws of the Federal Republic of Germany ("Germany"), except for the provisions on the status of
the Notes which will be governed by the laws of the Republic of Austria ("Austria").
The Notes will bear interest from and including 7 December 2020 (the "Interest Commencement Date") to but excluding
7 December 2025 (the "First Reset Date") at a rate of 5.750 per cent. per annum. Thereafter, unless previously redeemed, the Notes
will bear interest from and including the First Reset Date at a rate per annum equal to the Reference Rate for the relevant Reset Period
(each as defined in § 3 of the terms and conditions of the Notes (the "Terms and Conditions")) plus a margin of 1,120.8 basis points
per annum (including a step-up of 500 basis points).
Interest on the Notes will be payable annually in arrear on 7 December of each year (each an "Interest Payment Date"), commencing
on 7 December 2021.
The Issuer is entitled to defer interest payments under the Notes under certain circumstances (as set out in § 4(1) of the Terms and
Conditions, such payments the "Deferred Interest Payments"). Such Deferred Interest Payments will not bear interest. The Issuer
may pay such Deferred Interest Payments (in whole or in part) at any time upon due notice (as set out in § 4(2) of the Terms and
Conditions) and will be required to pay such Deferred Interest Payments (in whole, but not in part) under certain other circumstances
(as set out in § 4(3) of the Terms and Conditions).
The Notes have no final maturity date. The Issuer may redeem the Notes with effect as of any date during the period from and including
7 September 2025 to and including the First Reset Date or on any Interest Payment Date thereafter.
The Issuer may call the Notes for redemption (in whole but not in part) with effect as of any date prior to but excluding
7 September 2025 at the Make-whole Amount. The "Make-whole Amount" will be the higher of the Principal Amount of the Notes
or their Present Value (all as defined and further described in the Terms and Conditions).
The Issuer may further redeem all outstanding Notes at any time upon occurrence of a (i) Gross-up Event, (ii) a Tax Event, (iii) an
Accounting Event, (iv) in case of minimal outstanding aggregate principal amount or (v) upon occurrence of a Change of Control (all
as defined and further described in the Terms and Conditions). If a Change of Control occurs and the Issuer does not redeem the Notes
in whole, the applicable rate of interest will be subject to an additional 500 basis points per annum above the otherwise applicable
prevailing rate of interest.
The Notes will initially be represented by a temporary global note in bearer form (the "Temporary Global Note"). Interests in the
Temporary Global Note will be exchangeable, in whole or in part, for interest in a permanent global note in bearer form (the
"Permanent Global Note" and together with the Temporary Global Note, the "Global Notes") not earlier than 40 days after the Issue
Date (the "Exchange Date"), upon certification as to non-U.S. beneficial ownership. The Global Notes will be deposited with a
common depositary for Clearstream Banking S.A and Euroclear Bank S.A./N.V. (together, the "Clearing System").
This prospectus (the "Prospectus") does not constitute a prospectus within the meaning of Regulation (EU) No 1129/2017 of the
European Parliament and of the Council of 14 June 2017 (as amended, the "Prospectus Regulation"). Neither the Luxembourg
Financial Supervisory Authority, the Commission de Surveillance du Secteur Financier, nor any other "competent authority" (as
defined in the Prospectus Regulation) has approved this Prospectus or reviewed information contained in this Prospectus.

This Prospectus constitutes a prospectus for the purpose of Part IV of the Luxembourg Law of 16 July 2019 on Prospectuses for
Securities. Application has been made to list the Notes on the official list (the "Official List") of the Luxembourg Stock Exchange and
for admission to trading of the Notes on the Euro MTF Market operated by the Luxembourg Stock Exchange, which is a multilateral
trading facility for the purposes of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial
instruments, as amended, ("MiFID II"), and, therefore, not an EU-regulated market.
This Prospectus will be published in electronic form together with all documents incorporated by reference on the website of the
Luxembourg Stock Exchange (www.bourse.lu).
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes in any jurisdiction where such offer
or solicitation is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act")
and subject to certain exceptions, the Notes may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons.
Prospective purchasers of the Notes should ensure that they understand the nature of the Notes and the extent of their exposure to risks
and that they consider the suitability of the Notes as an investment in light of their own circumstances and financial condition. Investing
in the Notes involves certain risks. Please review the section entitled "Risk Factors" beginning on page 8 of this Prospectus.
Joint Global Coordinators and Joint Structuring Agents
BNP PARIBAS
Morgan Stanley
Joint Bookrunners
BNP PARIBAS
Morgan Stanley
UniCredit Bank Austria

RESPONSIBILITY STATEMENT
The Issuer, with registered office in Lenzing, Austria, accepts responsibility for the information contained in this
Prospectus and hereby declares that, having taken all reasonable care to ensure that such is the case, the information
contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and does not omit anything
likely to affect the import of such information.
The Issuer further confirms that (i) this Prospectus contains all information with respect to the Issuer, the Group and
the Notes which is material in the context of the issue and offering of the Notes, including all information which,
according to the particular nature of the Issuer and the Notes is necessary to enable investors and their investment
advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses, and
prospects of the Issuer and the Group and of the rights attached to the Notes; (ii) the statements contained in this
Prospectus relating to the Issuer, the Group and the Notes are in every material respect true and accurate and not
misleading; (iii) there are no other facts in relation to the Issuer, the Group and the Notes the omission of which
would, in the context of the issue and offering of the Notes, make any statement in this Prospectus misleading in any
material respect; and (iv) reasonable enquiries have been made by the Issuer to ascertain such facts and to verify the
accuracy of all such information and statements.
NOTICE
No person is authorized to give any information or to make any representation other than those contained in this
Prospectus and, if given or made, such information or representation must not be relied upon as having been
authorized by or on behalf of the Issuer or the Joint Bookrunners (as defined in the section "Subscription and Sale of
the Notes").
This Prospectus should be read and understood in conjunction with any supplement hereto and any documents
incorporated herein or therein by reference.
Each investor contemplating purchasing any Notes should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Prospectus does not constitute
an offer of Notes or an invitation by or on behalf of the Issuer or the Joint Bookrunners to purchase any Notes.
Neither this Prospectus nor any other information supplied in connection with the Notes should be considered as a
recommendation by the Issuer or the Joint Bookrunners to a recipient hereof and thereof that such recipient should
purchase any Notes.
This Prospectus reflects the status as of its date. The offering, sale and delivery of the Notes and the distribution of
this Prospectus may not be taken as an implication that the information contained herein is accurate and complete
subsequent to the date hereof or that there has been no adverse change in the financial condition of the Issuer since
the date hereof.
To the extent permitted by the laws of any relevant jurisdiction, neither any Joint Bookrunner nor any of their
respective affiliates nor any other person mentioned in this Prospectus, except for the Issuer, accepts responsibility
for the accuracy and completeness of the information contained in this Prospectus or any document incorporated by
reference, and accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these persons
accept any responsibility for the accuracy and completeness of the information contained in any of these documents.
The Joint Bookrunners have not independently verified any such information and accept no responsibility for the
accuracy thereof.
This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in
any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make
such offer or solicitation.
The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required to inform themselves about and
to observe any such restrictions. For a description of the restrictions applicable in the EEA, the United States of
3

America, Singapore, the United Kingdom, Hong Kong, Switzerland and Canada see "Subscription and Sale of the
Notes Selling Restrictions".
The Notes issued pursuant to this Prospectus are complex financial instruments and are not a suitable or appropriate
investment for all investors. In some jurisdictions, regulatory authorities have adopted or published laws, regulations
or guidance with respect to the offer or sale of securities such as the Notes to retail investors.
For the avoidance of doubt the content of any website referred to in this Prospectus does not form part of this
Prospectus and the information on such websites has not been scrutinized or approved by the Luxembourg Stock
Exchange.
The language of this Prospectus is English. In respect of the Terms and Conditions German is the controlling and
legally binding language.
In this Prospectus all references to "", "EUR" or "Euro" are to the currency introduced at the start of the third stage
of the European Economic and Monetary Union, and as defined in Article 2 of Council Regulation (EC) No 974/98
of 3 May 1998 on the introduction of the Euro, as amended.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET: PROFESSIONAL
INVESTORS AND ECPS ONLY
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of
the Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and professional
clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Notes to eligible counterparties
and professional clients are appropriate. Any person subsequently offering, selling or recommending the Notes (a
"distributor") should take into consideration the manufacturers' target market assessment; however, a distributor
subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes (by either
adopting or refining the manufacturers' target market assessment) and determining appropriate distribution channels.
PRIIPS REGULATION / PROHIBITION OF SALES TO EEA AND UK RETAIL
INVESTORS
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the European Economic Area ("EEA") or the United Kingdom.
For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11)
of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive (EU) 2016/97 (as amended, the
"Insurance Distribution Directive"), where that customer would not qualify as a professional client as defined in
point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU)
No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them
available to retail investors in the EEA or the United Kingdom has been prepared and therefore offering or selling
the Notes or otherwise making them available to any retail investor in the EEA or the United Kingdom may be
unlawful under the PRIIPs Regulation.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting an
offer to purchase, any Notes (or any beneficial interests therein) from the Issuer and/or the Joint Bookrunners the
foregoing representations, warranties, agreements and undertakings will be given by and be binding upon both the
agent and its underlying client.
SINGAPORE SECURITIES AND FUTURES ACT PRODUCT CLASSIFICATION
In connection with Section 309B of the Securities and Futures Act (Chapter 289) of Singapore (the "SFA") and the
Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the "CMP Regulations 2018"),
the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that
the Notes are `prescribed capital markets products' (as defined in the CMP Regulations 2018) and Excluded
Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS
Notice FAA-N16: Notice on Recommendations on Investment Products).

INFORMATION FOR PROSPECTIVE INVESTORS IN CANADA
This Prospectus is not, and under no circumstances is to be construed as, an advertisement or a public offering of the
securities in Canada. This Prospectus constitutes an "exempt offering document" as defined in and for the purposes
of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar
regulatory authority in Canada in connection with the offer and sale of the Notes. No securities commission or similar
regulatory authority in Canada has reviewed or in any way passed upon this Prospectus or on the merits of the Notes
and any representation to the contrary is an offence.
The offer and sale of the Notes in Canada is being made on a private placement basis only and pursuant to an
exemption from the requirement that the issuer prepares and files a prospectus under applicable Canadian securities
laws. Any resale of the Notes acquired by a Canadian investor in this offering must be made in accordance with
applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus
requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption
from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These
resale restrictions may under certain circumstances apply to resales of the Notes outside of Canada.
Securities legislation in certain provinces or territories of Canada may provide Canadian investors with remedies for
rescission or damages if an "offering memorandum" such as this Prospectus (including any amendment hereto)
contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser
within the time limit prescribed by the securities legislation of the purchaser's province or territory. The purchaser
should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for the
particulars of these rights or consult with a legal advisor.
BENCHMARK REGULATION: STATEMENT ON REGISTRATION OF BENCHMARK
ADMINISTRATOR
Following the First Reset Date, interest amounts payable under the Notes are calculated by reference to the annual
swap rate for swap transactions denominated in Euro with a term of 5 years, which appears on the Reuters Screen
Page ICESWAP2 / EURFIXA and which is provided by ICE Benchmark Administration Limited ("IBA"). As at the
date of this Prospectus, IBA appears on the register of administrators and benchmarks established and maintained by
the European Securities and Markets Authority ("ESMA") pursuant to Article 36 of the Benchmark Regulation
(Regulation (EU) 2016/1011) (the "Benchmark Regulation").
STABILISATION
IN CONNECTION WITH THE ISSUE OF THE NOTES, BNP PARIBAS (THE "STABILISING
MANAGER") (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISING MANAGER) MAY
OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL.
HOWEVER, STABILISATION MAY NOT NECESSARILY OCCUR. ANY STABILISATION ACTION
MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE
TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY CEASE AT ANY TIME, BUT
IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE
NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY
STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE STABILISING
MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE STABILISING MANAGER) IN
ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES OF ANY RELEVANT JURISDICTION
(INCLUDING RULES AND OTHER REGULATORY REQUIREMENTS GOVERNING ANY STOCK
EXCHANGES WHERE SUCH NOTES ARE LISTED).
5

FORWARD-LOOKING STATEMENTS
This Prospectus includes certain "forward-looking statements". All statements other than statements of historical
facts included in this Prospectus, including, without limitation, those regarding the Issuer's and the Group's financial
positions, business strategies, plans and objectives of management for future operations, are forward-looking
statements. These forward-looking statements can be identified by the use of forward-looking terminology, including
the terms "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "guidance",
"intend", "may", "plan", "project", "probability", "target", "goal", "objective", "should" or "will" or, in each
case, their negative, or other variations or comparable terminology. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements
of the Issuer or the Group, or industry results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based
on numerous assumptions regarding the Issuer's or the Group's, as applicable, present and future business strategies
and the environment in which the Issuer or the Group, as applicable, will operate in the future. In addition, even if
their financial condition, results of operations and cash flows, and the development of the industry in which they
operate, are consistent with the forward-looking statements contained in this Prospectus, those results or
developments may not be indicative of results or developments in subsequent periods.
Any forward-looking statements in this Prospectus speak only as of the date on which they are made. The Issuer and
the Group expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any
forward-looking statement contained herein to reflect any change in their respective expectations with regard thereto
or any change in events, conditions or circumstances on which any such statement is based.
ALTERNATIVE PERFORMANCE MEASURES
This Prospectus contains non-IFRS measures and ratios which are not required by, or presented in accordance with,
International Financial Reporting Standards ("IFRS") as adopted by the EU or the accounting standards of any other
jurisdiction. The non-IFRS measures may not be comparable to other similarly titled measures of other companies
and should be considered together with the Group's IFRS results and liabilities. Non-IFRS measures and ratios are
not measurements of the Group's operating performance or liabilities under IFRS and investors should bear this in
mind when considering non -IFRS measures as alternatives to earnings before interest and taxes (EBIT) or group net
profit or other performance measures derived in accordance with IFRS or any other generally accepted accounting
principles, or as alternatives to cash flow from operating, investing or financing activities or to liabilities. Investors
should rely on the Group's IFRS results, supplemented by its non-IFRS measures, to evaluate the Group's
performance.
The Issuer presents non-IFRS measures to measure operating performance, the level of net debt and as a basis for its
strategic planning and forecasting, as well as monitoring the retained cash flows. The Issuer also believes that non-
IFRS measures and similar measures are widely used by certain investors, securities analysts and other interested
parties as supplemental measures of operating performance and financial standing.
For additional information see "Description of the Issuer and the Group Financial Information".

TABLE OF CONTENTS

RISK FACTORS ................................................................................................................................................ 8
USE OF PROCEEDS ........................................................................................................................................24
TERMS AND CONDITIONS OF THE NOTES ..............................................................................................25
DESCRIPTION OF THE ISSUER AND THE GROUP ...................................................................................63
TAXATION .......................................................................................................................................................89
SUBSCRIPTION AND SALE OF THE NOTES ..............................................................................................92
GENERAL INFORMATION ............................................................................................................................96
DOCUMENTS INCORPORATED BY REFERENCE .....................................................................................97

7

RISK FACTORS
Before deciding to purchase the Notes, investors should carefully review and consider the following risk factors and
the other information contained in this Prospectus. Should one or more of the risks described below materialize, this
may have a material adverse effect on the business, prospects, shareholders' equity, assets, financial position and
results of operations (Vermögens-, Finanz- und Ertragslage) or general affairs of the Issuer or the Group. Moreover,
if any of these risks occur, the market value of the Notes and the likelihood that the Issuer will be in a position to
fulfil its payment obligations under the Notes may decrease, in which case the holders of the Notes (the
"Noteholders") could lose all or part of their investments. Factors which the Issuer believes may be material for the
purpose of assessing the market risks associated with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes,
but the Issuer may be unable to pay interest, principal or other amounts on or in connection with the Notes for other
reasons than those described below. Additional risks of which the Group is not presently aware could also affect the
business operations of the Group and have a material adverse effect on the Group's business activities and financial
condition and results of operations. Prospective investors should read the detailed information set out elsewhere in
this Prospectus (including any documents incorporated by reference herein) and reach their own views prior to
making any investment decision.
The following risk factors are classified into categories according to their nature.
The order in which the risks are presented does not necessarily reflect the likelihood of their occurrence or the
magnitude of their potential impact on the business, financial condition and results of the operations of the Group.
Words and expressions defined in the Terms and Conditions of the Notes below shall have the same meanings in this
section.
Potential investors should, among other things, consider the following:
Risks relating to the Issuer and the Group
Market Risk
Lenzing's profitability is influenced by macroeconomic effects outside of its control
As an international corporation, the Group is exposed to a variety of macroeconomic risks. Standard viscose fiber
prices are quoted daily on a Chinese index. Cotton and polyester are also quoted on commodity exchanges and also
influence global fiber prices. The development of the prices for textile fibers and, to a lesser extent also for nonwoven
fibers has historically been cyclical due to macroeconomic effects. Lenzing fibers are mainly a blending partner with
cotton and synthetic fibers on many submarkets. Consequently, price trends for cotton and polyester influence the
prices of Lenzing's fibers.
In the second half of 2019 and the first quarter of 2020, significant decreases in global fiber prices, in part decreases
to historical lows, negatively affected the Group's operating results. Prices may remain at current historically low
levels for a longer period and could materially adversely affect Lenzing's cash flow and ability to meet its obligations
under the Notes. Furthermore, macroeconomic factors may cause a lack of demand for the Group's products, which
could result in pressure on volumes and at the same time put persistent pressure on their prices. A sustained period
of weak demand for or excess supply of wood-based cellulosic fibers would adversely affect prices for Lenzing's
fibers, which would further negatively influence the Group's operating results.
Disruption of the textile fibers markets mainly in Asia can affect Lenzing's sales
The Group generates significant revenue in Asia. Up until the third quarter of 2020, wood-based cellulosic fiber sales
in its sales region North Asia represented 37.0% of the Group's total fiber sales which is mainly textile related. As a
result, the Group has substantial exposure to risks arising from economic, political and social conditions in Asia. The
Group could be harmed by a variety of adverse developments in Asian markets, many or all of which are beyond its
control, such as:

· unfavorable changes in economic policy by central or major regional governments;
· import restrictions, export licenses, exchange controls and similar restrictions on remittances abroad,
changes in the regulatory environment and applicable laws;
· exchange rate instability and over- or devaluation of the currencies in its primary target sales markets;
· deterioration of economic conditions in China, Indonesia or other key markets;
· political instability, such as in Thailand or Turkey; and
· adverse changes in tax policies and laws.
Any of these factors could influence the normal functioning of the textile fibers sales markets, resulting in an adverse
effect on the Group's results of operations.
A continued slow-down of the economy due to COVID-19 or similar pandemics can negatively affect Lenzing's
financial condition
The global economic downturn that began with the COVID-19 crisis adversely affected all economies across the
world. The impact of the COVID-19 crisis on the business of the Group can still not be predicted. The marked
reduction in worldwide demand for textiles and garments resulted in further pressure on market prices for wood-
based cellulosic fibers. During the peak of the COVID-19 crisis for Lenzing in the second quarter of 2020, it had to
reduce its production capacity leading to a quarterly EBITDA of EUR 27.1 million versus EUR 69.6 million in the
first quarter of 2020.
A prolonged COVID 19 crisis could lead to continued decreases in demand or prices in the global markets in the
future, and may cause difficulties in obtaining raw materials, which could adversely affect the Group's financial
condition and results of operations.
Fluctuations in exchange rates require hedging that can affect profits or losses and/or equity within a certain period
The Group generates a significant portion of its sales in currencies other than in Euro, in particular the U.S. dollar
and the Chinese yuan. In addition, the Group incurs costs that are not naturally hedged (i.e. by being matched against
sales generated in the same currency) in currencies other than Euro, in particular Brazilian Reais, Indonesian Rupiahs
or Thai Baht. The Group uses cash flow hedges against currency exchange risk in its business operations. These
derivative financial instruments are carried at fair value. In the case of changes in fair value of cash flow hedges
unrealized losses are initially recognized directly in equity and affect profit or loss of the period at the time when
hedged transactions are realized.
Increased import duties or other trade restrictions can have a negative effect on the Group's profits and other
business activities
The Group has production facilities in six countries and is building new production facilities in Thailand and Brazil.
Business partners (customers and suppliers) of the Group are spread over most countries worldwide with fiber sales
of 37.0% in its sales region North Asia, 30.3% in its sales region Asia, Middle East & Africa and 32.7% in its sales
regions Europe & Americas by the first nine months of 2020.
Global trade conflicts have increased over the last years especially between the United States and China which is the
main fiber market for Group. The Group is therefore exposed to factors, such as a potential implementation of anti-
dumping duties on pulp imports to China or on lyocell, over which it has little control, and which may adversely
affect its growth prospects and business activities in these countries.
9

Strategic Risks
The large capital expansion project in Brazil could face cost overruns and delays leading to significantly negative
effects on Lenzing's financial condition
The new 500.000t dissolving wood pulp plant including adjacent plantations currently being constructed in Brazil
represents the largest capital expenditure project in Lenzing's history. A material increase in expected investment
costs or a delay in the start-up of the mill, currently planned for the first half of 2022, will have a significant negative
effect on Lenzing's financial condition.
On May 29, 2020, Lenzing entered into a parent guarantee agreement (the "Parent Guarantee") and an equity
contribution and share retention agreement in respect of certain indebtedness of its 51%-owned subsidiary, LD
Celulose S.A., as part of an approximately USD 1.1 billion financing from International Finance Corporation, IDB
Invest, the Finnish export credit agency Finnvera plc and certain commercial lenders pursuant to a common terms
agreement and certain senior loan agreements dated the same day (the "LDC Financing Arrangements"). The
proceeds of this financing will be used to fund the construction, development and maintenance of the dissolving
wood pulp plant in Brazil.
Repayments of all tranches of the loans are contractually agreed to start in 2023 with the first USD 500 million
agreed to be repaid over the time by 2029, another USD 500 million by 2031, and the remainder by 2033. Should
LD Celulose S.A. have insufficient funds to either repay its debt service obligations under the LDC Financing
Arrangements or to complete construction of the dissolving wood pulp plant, Lenzing will be required to contribute
additional equity according to its share to the subsidiary which may have a significant effect on Lenzing's liquidity
position. Furthermore, LD Celulose S.A. committed to several milestones in the financing agreements among others
regarding social and environmental compliance, permitting or perfection of security, all requiring cooperation of
third parties. If any of these milestones were not achieved on time and the financing banks were not to provide a
waiver or prolongation, this could constitute an event of default under the financing agreements leading to a
repayment of the amounts owed. For further information on the financing agreements please also refer to
"Description of the Issuer and the Group - Material Contracts - Financing Agreements for the Brazilian Dissolving
Wood-Pulp Plant" below.
Under the Parent Guarantee, the joint venture partners Duratex (49%) and Lenzing (51%) guarantee, pro rata to their
shares, LD Celulose S.A.'s indebtedness under the LDC Financing Arrangements. The Parent Guarantee contains
certain restrictive undertakings by Lenzing, that apply prior to the physical completion of the dissolving wood pulp
plant, including, among others, (i) limitations on its ability to incur certain types of financial indebtedness excluding,
among other things, indebtedness used to refinance existing financial debt, (ii) limitations on its ability to declare or
pay dividends or make payments on subordinated financial debt (excluding the Notes, unless this would trigger an
event of default or potential event of default under the Parent Guarantee, which would, inter alia, be the case if
following the interest payment the Issuer would no longer comply with the cash requirement described under (iv)),
(iii) the limitation to redeem the Notes if this would trigger an event of default or potential event of default under the
Parent Guarantee, which would, inter alia, be the case if upon the redemption of the Notes the Issuer would no longer
comply with the cash requirement described under (iv), (iv) the requirement to maintain at the end of each financial
quarter an amount of EUR 250 million cash or cash equivalents on the balance sheet of the Issuer's consolidated
financial statements and (v) limitations on its ability to sell, transfer or otherwise dispose of certain of, or incur
expenditures in relation to, its fixed assets above a materiality threshold (please see also "Risks relating to the Notes
 The Notes are undated securities in which an investment constitutes a financial risk for an indefinite period and
the Issuer could be contractually restricted to redeem the Notes " and "Risks relating to the Notes Payments under
the Notes may be deferred at the option of the Issuer and the Issuer could be obligated to such a deferral under
existing financing arrangements" below).
Furthermore, Lenzing has guaranteed the performance and payment of an off-take agreement by its subsidiary Pulp
Trading GmbH for LD Celulose S.A.'s supply of dissolving wood pulp from the Brazilian plant. In addition, Lenzing
will not be able to internally utilize all of the dissolving wood pulp manufactured by LD Cellulose S.A. and will, at
least in the beginning, have, to sell substantial volumes to the merchant market. Should Pulp Trading GmbH not be